from the pulling-it-up-from-the-roots dept

So you'll recall that before Comcast, AT&T, Verizon and friends convinced the Trump FCC to ignore the public and kill net neutrality, they had attempted to dismantle the rules legally. That effort didn't go very well, with the U.S. Court of Appeals for the D.C. Circuit upholding the FCC's Open Internet Order in June of 2016, and ISPs losing a subsequent en banc appeal. More specifically, the courts found that the former Wheeler-run FCC was well within its legal right to reclassify ISPs as common carriers under the Telecom Act.

The 2016 FCC victory made sense, especially if you recall that the agency lost its 2014 legal fight with Verizon in part because it tried to implement net neutrality without first putting itself on legal footing by classifying ISPs as common carriers under Title II. You might also recall that Wheeler at the time initially wasn't sure about the Title II route, but changed his mind based on available facts and evidence, back when people, you know, actually still did that.

But that was then and this is now. Lawyers for the FCC and Department of Justice filed a brief (pdf) with the Supreme Court last Friday, urging it to vacate the 2016 court ruling that upheld the Wheeler-era net neutrality rules. The move is necessary, FCC lawyers inform the court, because of the FCC's new, comically-named "Restoring Internet Freedom" proposal has purportedly changed the facts on the ground:

"The court of appeals upheld the 2015 Order primarily because it concluded that it was required to defer to the FCC’s legal and factual judgments as reflected in that order. But the Commission itself has now repudiated those factual and legal judgments in a new order issued after full notice-and-comment proceedings."

Of course we've noted time and time again how the repeal of net neutrality was a facts-optional shitshow of comical proportions. Given the FCC's entire justification for repeal was based on bogus ISP lobbyist math and bullshit, the FCC leaning on the facts here is pretty funny. Even if the courts don't agree with that, FCC lawyers state, the Supreme Court should just go ahead and agree with ISPs anyway:

"Alternatively, if this Court concludes that the 2018 Order did not render this case moot, or if it prefers not to resolve that issue, it should grant the petitions for writs of certiorari, vacate the judgment below, and remand for further proceedings to allow the court of appeals to consider in the first instance the effect of the 2018 Order on this litigation.

That could happen for a number of reasons, including the court finding the FCC violated the Administrative Procedure Act by dismantling a major regulatory effort based on little more than hot air and string cheese. The FCC can't just reverse such a massive regulatory move without first showing that broadband market realities changed dramatically enough to warrant it, something SEC filings, CEO statements and earnings report show didn't happen. That's why you'll often see Ajit Pai routinely lying about how net neutrality demolished sector investment, something that isn't supported by the facts.

In short, giant ISPs like Comcast and AT&T know they'll soon have to relitigate this in court. That's why they're pushing for a new fake net neutrality laws they've written with an eye on passing something that pre-empts both the restoration of the federal rules, or the myriad of state solutions that are now popping up. And they know that should they lose, this could very likely head to the Supreme Court. A Supreme Court that could soon be staffed by Brett Kavanaugh, who bizarrely bought the completely bogus ISP claim (during the first round of the FCC's fight with Verizon) that net neutrality rules violate an ISPs First Amendment rights.

The short version? ISPs are worried that Ajit Pai's ham-fisted and facts-optional attack on net neutrality won't survive the looming court challenge by consumer groups and Mozilla. As such, they're gearing up for what they hope will be a Kavanaugh-staffed Supreme Court to help deliver the killing blow, something that would be greatly aided by neutering existing precedent. ISPs are well aware that public sentiment, factual data and lower course rulings could restore the FCC's extremely popular net neutrality rules, and we wouldn't want that, right?

from the post-truth-apocalypse dept

We've pretty well established by now that the FCC's repeal of net neutrality is being justified by a lot of fluff and nonsense with no factual basis in reality. Like claims that net neutrality killed sector investment, which are easily debunked by SEC filings, earnings reports, and numerous public CEO comments to investors (who, unlike you, they're legally not allowed to lie to). From Ajit Pai's claims that net neutrality emboldens fascists in North Korea and Iran, to his most recent claim that net neutrality fears were overhyped because Twitter still somehow works, blatant bullshit is the foundation of this entire repeal effort.

For years now, one constant bit of bullshit spread by ISPs was the claim that the Obama-era White House somehow "illegally pressured" Tom Wheeler's FCC into passing tougher net neutrality rules. As we noted at the time that claim was nonsensical,
since there's no law stopping the White House from expressing its opinion on what policy should be. From Bill Clinton urging then FCC boss Reed Hundt to ban alcohol ads on TV, to George W Bush telling then FCC boss Michael Powell to deregulate media ownership, such behavior is historically perfectly normal.

Again, this fact didn't stop ISPs and their water carriers in Congress and key media outlets from repeatedly trying to claim that Obama engaged in all manner of shifty behavior to force the FCC to create the rules. The Wall Street Journal in 2014, for example, professed that "unusual, secretive efforts inside the White House" caused FCC boss Tom Wheeler to shift his position from weaker, Title I based rules, to tougher Title II based rules. The idea that Obama's White House had undertaken a covert "federal takeover of the internet" quickly became gospel across countless partisan echoverses.

The criticism was enough to drive investigations in both the Senate and by the FCC’s Inspector General. And while nobody from either government body could be bothered to tell the public the outcome of these investigations, Motherboard recently filed several FOIA requests that now show the outcome of these investigations wound up being a giant bupkis:

"After reviewing more than 600,000 emails, the independent office found that there was no collusion between the White House and the FCC: “We found no evidence of secret deals, promises, or threats from anyone outside the Commission, nor any evidence of any other improper use of power to influence the FCC decision-making process."

Which again, was what we suggested back in early 2015. None of the claims that heralded Obama's "illegal takeover of the internet" had the slightest bit of evidence in support of them, noted the FCC Inspector General's report:

"Nothing we found refuted the factual findings in the Senate Staff Report,” the IG wrote (bolding by agency). “More importantly, nothing we found in the complete, unredacted record evidenced any undue influence that would have militated in favor of a more comprehensive investigation."

What the Inspector General found, then, were career public servants doing their job: “Nothing in these, or in any other emails appeared to indicate there was pressure to delay the Order from the December meeting from any source other than concerned FCC staffers,” the report found, adding that there was “no indication” that a draft of the net neutrality regulations had been circulated improperly.

Obama's first FCC boss Julius Genachowski was arguably a wishy washy fence sitter. But his replacement Tom Wheeler wound up actually being the rare type of person capable of changing his mind based on the available evidence. And when the available evidence (and the courts) made it clear that you can't have effective net neutrality rules without classifying ISPs as common carriers until Title II of the Communications Act, that's exactly what Wheeler did. He didn't make an evidence-based decision because of some secret White House cabal, he did it because that was his fucking job. And he's subsequently been punished for it.

Of course the very idea that net neutrality (aka wanting a healthy, competitive internet) is somehow partisan was already bullshit in and of itself. It's a construct built by the telecom industry's lobbying and policy apparatus, perpetuated by numerous ISP-funded groups. The express goal is to divide the public, sow dissent, and stall meaningful reform of a broken, uncompetitive market. If you hadn't noticed, this tactic has proven immeasurably successful.

from the oh-look,-they-were-lying dept

If you've followed the whole net neutrality debate for a while, you may remember one of the more ridiculous talking points when the 2015 rules were put in place: it was the line that the rules were "400 pages of regulation on the internet." People kept listing out the page numbers to suggest how crazy it was, and just how much bad stuff the FCC must be doing in "regulating the internet." Ajit Pai kicked it all off with his tweet with a picture of himself holding the initial version of the rules, complaining that it was "Obama's 332-page plan to regulate the internet."

Here is President Obama's 332-page plan to regulate the Internet. I wish the public could see what's inside. pic.twitter.com/bwwAsk8ZiB

Others picked up on this theme. The eventually released rules were 400 pages exactly, leading to lots of hand-wringing and whining from the usual suspects about how this was some sort of massive takeover of the internet, hidden in so many pages. Of course, that ignored that the actual "rules" take up just a few pages in the order. It's actually eight pages. You can see them on pages 283 through 290 of the 400 page document. All the rest of it just explains the rules -- as is required by law -- responding to comments that had been raised during the open comment period. And, even more pages are devoted to explaining what the rules do not allow the FCC to do. Also, part of the 400 pages included Ajit Pai's own 64 pages of "dissent." It's hard to see how that should be counted as part of the "regulation."

And yet that didn't stop the likes of Ajit Pai from insisting that there were 332 pages of regulations in there. And for others to pick up on similar numbers or the full 400 page number. A group called "American Action Forum" called it a "400 page monstrosity." During her campaign for President, Carly Fiorina said the first thing she would do as President is "roll back the 400 pages of regulations the FCC just rolled out over the internet." Leaving aside that the President can't overrule the FCC like that, she's also relying on that misleading 400 page number. Infowars got in on the action also, saying that the hidden within the 400 page rules were a plan "to seize the entire internet." And, oh boy, were there lots of tweets attacking the whole 400 pages thing. For example, here's Mike Wendy, a consistent gadfly in policy discussions, always always always supporting the telco's position, insisting that the new rules are 400 pages (even though he, of all people, knows better):

But, I'm curious where are all these people now, in commenting on the size of Ajit Pai's order? In its current form, it weighs in at a hefty 210 pages (and that's before additional things like Commissioner statements/dissents will get added). It's true that these "rules" are "shorter" than Wheeler's. The actual rules this time are 2 pages, rather than 8. But, I'm curious why Carly Fiorina isn't complaining about 200+ pages of "new" rules for the internet. Indeed, I can't find any comment from her anywhere. American Action Forum doesn't have a story up complaining about 200 pages of new internet regulations. Infowars seems positively giddy that Ajit Pai has released 200+ pages of new rules, apparently freeing us from some sort of George Soros conspiracy or something. Meanwhile, I've gone through Mike Wendy's tweets, and despite him tweeting many, many, many times about the "400 pages" in Wheeler's rules, somehow he doesn't ever seem to mention the over 200 pages in Pai's rules. He doesn't mention why it takes "over 200 pages to explain" why Pai is rolling back the last order. I wonder why. Instead, he's declaring these new 200+ pages of rules a "win for consumers, society, innovation and free speech." Hmmmmmm. It's almost as if it's not the page count that matters at all...

Incredibly, many of the people now cheering on the new rules are still attacking the original order as being "400 pages" without acknowledging that the new "rules" are over 200 pages.

Obviously no one is complaining about 200+ pages of new regulations because these aren't 200+ pages of new regulations. But neither was the FCC's 2015 order 400 pages of new regulations. There are lots of things to be concerned about with what Ajit Pai is doing here, but it does seem important not to forget the absolute bullshit that some people spewed in response to the 2015 rules, complaining over and over again about how they were so many pages long (even though they really weren't) -- when literally none of those people are commenting on the length of the new order.

from the special-guests dept

If you're a Techdirt reader or just a general regular on the ol' internet, our topic this week — the current situation with net neutrality and the FCC — needs little introduction. And we've got two very special guests joining us to discuss it: former FCC Chair Tom Wheeler (author of the rules that Ajit Pai is currently undoing) and his former advisor Gigi Sohn (who joined us on the podcast in February to predict pretty much exactly what is now happening). There are few people as qualified to talk about these issues, so enjoy this week's episode looking at Trump's FCC and the future of the internet as we know it.

from the not-at-all dept

I want to start out this post by making a key point: I know that it's become fashionable to launch into personal and ad hominem attacks on people we disagree with politically of late. We've sought to avoid doing that here on Techdirt, even if we often will criticize people and their positions in stark terms. Over the past few days, however, the ad hominem attacks on FCC chair Ajit Pai by some have been absolutely disgraceful -- and absolutely counterproductive. I disagree with Pai quite a lot (as you'll see below). But the venom and attacks he's received from many are not just unfair and misguided, but only serve to bolster the idea that the people arguing against him are unhinged from reality. I've met Pai a few times and have found him to be both thoughtful and intelligent. I still believe that he is deeply misguided about multiple important issues, but we can debate those issues without resorting to personal attacks. I hope that others will follow suit.

Ever since Ajit Pai became chair of the FCC he's been systematically undoing more or less everything his predecessor, Tom Wheeler, accomplished during his (perhaps surprisingly) effective chairmanship. To do that, Pai has engaged in a series of statements and positions that, at best, have involved misrepresentations of reality. There are a number of these that may be worth exploring, but I want to focus on one that I'll refer to as Ajit Pai's Big Lie, because it's the key argument he's made, underlining his reasoning for chucking out the existing net neutrality rules. Here is the opening paragraph from the FAQ that Pai released last week, setting out his reasoning... and also succinctly presenting Ajit Pai's Big Lie:

Over twenty years ago, President Clinton and a Republican Congress established the policy of the United States “to preserve the vibrant and competitive free market that presently exists for the Internet . . . unfettered by Federal or State regulation.” For decades, Commission policies encouraged broadband deployment and the development of the Internet. That ended two years ago. In 2015, the Commission imposed heavy-handed, utility-style regulation on Internet service providers (ISPs). Since then, broadband investment has fallen for two years in a row—the first time that that’s happened outside a recession in the Internet era. And new services have been delayed or scuttled by a regulatory environment that stifles innovation.

You might think that the "Big Lie" is the idea that the 2015 rules killed investment. And that is a lie. Actual evidence from financial reports has proven that completely false repeatedly. But, that's a smaller lie here. Ajit Pai's Big Lie is the idea that gutting all net neutrality protections is somehow returning FCC policy to the way things were two years ago, and that "for decades" the FCC kept out of this debate. All of that is wrong. And, unlike the other lie concerning investment -- where Pai and others can fiddle with numbers to make his claims look right -- Ajit Pai knows that the Big Lie is false.

Pai likes to point back to the Telecommunications Act of 1996 as his starting point in claiming that the internet is free from regulations, and suggests that things just changed with the 2015 FCC order. But he literally knows this is wrong. First of all, for all his talk of using 1996 as the starting date to show "decades" of supposedly unchanged FCC positions on this, he conveniently leaves out that the FCC didn't actually classify cable broadband as an information service... until 2002. That's from the FCC's own announcement about it. And this was fought out in court, eventually leading to the Brand X Supreme Court ruling in 2005 that said the FCC had the right to determine if broadband was an information service or a telco service (which is why the 2015 order has been upheld).

And, even then, telco (i.e., DSL) based broadband was still classified under Title II. It was only in 2005 that the FCC officially reclassified telco-based broadband as an information service, rather than a Title II covered telco service. This move actually stripped broadband of the one feature that had created the most competitive markets: the requirement to share their lines.

So, as a starting point, the idea that there's been a consistent policy position from 1996 until 2015 is simply wrong. The FCC itself changed the classification of broadband providers in 2002 and again in 2005.

Next, the idea that "net neutrality" itself is a new concept that only came about with the 2015 order is complete and utter hogwash. And, again, this is something that Pai knows well. If you go back through the previous four FCC chairs -- under both Democrat and Republican administrations -- they all supported net neutrality. They just struggled with how to implement it. In 2004, then FCC chair Michael Powell presented his "guiding principles" for "preserving internet freedom." In that document, Powell laid out an early argument for net neutrality (before the term had really caught on), noting that it was important that broadband providers offer up full access to the entire internet equally.

In that speech, he actually warned of why it would be dangerous for an internet access provider to block a competing VoIP service, and that the FCC "must keep a sharp eye on market practices that will continue to evolve rapidly." And, indeed, a year later, when Powell discovered that a small ISP named Madison River was blocking VoIP calls via Vonage, Powell's FCC fined Madison Riverusing Title II as the justification (the consent decree refers to 47 USC 208, which is part of Title II).

So we had a Republican FCC chair who clearly supported net neutrality and used Title II to make it happen. How the hell can Ajit Pai square this with his claim of no one using Title II or supporting net neutrality until Tom Wheeler's 2015 order?

And we're just getting started. Powell's successor was Kevin Martin -- another Republican under President George W. Bush. Martin also strongly supported net neutrality and, in many ways, kicked off the process that eventually resulted in Wheeler's order. It was under Martin's watch that it was discovered that Comcast was throttling BitTorrent and the FCC issued an order telling Comcast to knock it off. By that point, the FCC had already (see above) made it clear that broadband was not a Title II service, so it relied on other parts of its claimed mandate to issue the order.

That went to court and the court said that the FCC did not have the proper authority to police such a net neutrality violation under the existing rules. The court said that the FCC was trying to stretch its ancillary authority too far -- that even though the FCC wanted to, it could not enforce net neutrality requirements on information services. Basically, the court was telling the FCC it fucked up in reclassifying broadband away from Title II, even as it still believed in the importance of net neutrality (and, yes, again, as a reminder, this was under a Republican FCC).

That's why the next FCC chair, Julius Genachowski, proposed a different set of rules for net neutrality in 2010. However, under tremendous pressure from the broadband providers, Genachowski punted and tried to craft net neutrality rules without reclassifying broadband companies under Title II. Verizon (who helped write the rules) still sued over these new rules... and won. Basically, the court said (again) "Hey, FCC, you clearly want net neutrality, but the only way to do that is to reclassify broadband under Title II."

It was only then, with the next FCC chair, Tom Wheeler, that the FCC actually did so. And that's why Wheeler's Open Internet order has been held up in court already.

But read through all of this carefully, and try to square this with Ajit Pai's Big Lie -- that since 1996, broadband has been treated one way, and there's been no FCC push for net neutrality. The FCC considered broadband covered by Title II for nearly a decade after the Communications Act of 1996, and even as it was reclassifying broadband to be an information service, every single FCC chair expressed strong support for net neutrality and tried to enforce it against those who violated those principles. It was only because the courts pushed back, and noted that if the FCC wanted to enforce net neutrality, broadband needed to be Title II, that the FCC made that switch, supported with both the backing of the court (in those earlier rulings and following the order) and plenty of evidence for why it was necessary.

For Pai to argue that he's trying to bring things back to how they were from 1996 to 2015, he has to ignore all of that history. He's not taking us back to that era. He's doing something worse. He's wiping out the rules that courts said were necessary to enforce the FCC's long-held position on net neutrality. And, more importantly, he's reversed course on the FCC's long-held position on net neutrality.

And he's doing so with his Big Lie that he's merely reverting back to where things used to be.

from the pay-attention dept

Back in February, we had former top FCC staffer Gigi Sohn on our podcast and she laid out the likely strategy of Ajit Pai and Congress to kill net neutrality while pretending that they were protecting net neutrality. And so far, it's played out exactly according to plan. Each move, though, seems to be getting reported by most of the tech press as if it's some sort of surprise or unexpected move. It's not. There's a script and it's being followed almost exactly. So, as a reminder, let's go through the exact script:

Step 1: Set fire to old net neutrality rules

New FCC boss Ajit Pai announces that he's going releasing a plan to roll back the Open Internet rules that his predecessor, Tom Wheeler, put in place two years ago. This has been done, and Pai has released what's called an NPRM (a Notice of Proposed Rulemaking) which opens up a comment period. Once the comment period is over, the FCC can release its new rules and vote on them. The problem -- as basically everyone in telco knows (but which almost never gets mentioned in the press coverage) is that the FCC almost certainly will lose in court if it rolls back the rules that Wheeler put in place. This is important. Contrary to what you may have heard, the FCC isn't allowed to just willy nilly flip flop the rules.

Indeed, the FCC is barred by statute from putting in place "arbitrary and capricious" rule changes. Basically, every lawsuit challenging any FCC rulemaking includes claims that they were "arbitrary and capricious." And, to get over that burden, the FCC can't just change the rules willy nilly, but have to lay out clear evidence for why a change in policy is necessary. That's why the Wheeler Open Internet rules have been upheld by the DC Circuit (who shot down previous rules). Wheeler effectively laid out the clear reasons why the market had changed drastically in the decade plus since the FCC had declared broadband to be an "information service" rather than a "telecommunications service" (under Title II).

For Pai to successfully roll back those rules, he'd need to show that there was some major change in the market since the rules were put in place less than two years ago. That's... almost certainly going to fail in court. Again, this is important: Pai can change the rules, but that rule change will almost definitely be shot down in court. While many are assuming that the Pai's new rules are a done deal, they are not. I mean, he's almost certainly going to ignore the public outcry about how rolling back these rules will harm the internet. And he's almost certainly going to continue to blatantly misrepresent reality and (falsely) claim that investment in broadband has dropped because of these rules (despite tons of clear evidence that he's wrong). And, then he will pass new rules. But those rules will be challenged and he will almost certainly lose in court, and the old rules would remain in place.

Again: basically everyone in the FCC (including Pai) and in Congress know this. The press not reporting on this is a shame.

Step 2: Congress to the "rescue"

Congressional net neutrality haters (e.g. those receiving massive campaign contributions from big broadband players...) are well aware that Pai's plans have no chance in court. Yet, they want there to be this kind of uproar over the plans. They want the public to freak out and to say that this is bad for the internet and all that. Because this will allow them to do two things. First, they will fundraise off of this. They will go to the big broadband providers and act wishy washy on their own stance about changing net neutrality rules, and will smile happily as the campaign contributions roll in. It's how the game is played.

The second thing they will do... is come to "the rescue" of net neutrality. That is, they will put forth a bill -- written with the help of broadband lobbyists -- that on its face pretends to protect net neutrality, but in reality absolutely guts net neutrality as well as the FCC's authority to enforce any kind of meaningful consumer protection. We've already seen this with a plan from Senator Thune and this new bill from Senator Mike Lee.

Unfortunately, some reporters will buy this argument and pretend that these bills will "save net neutrality." The article at that link is correct that a change in administrations can lead an FCC to try to flip flop again on net neutrality, but totally ignores that any such attempt would totally flop in court as arbitrary and capricious, without actual evidence of a changed market. The article is also correct that Congress should fix this permanently, but misses two key factors: (1) Congress is way too beholden to broadband lobbyists to come up with anything that actually protects neutrality and (2) the plans presented so far are designed to kill net neutrality while pretending to "protect" it.

This latter point is why Verizon's General Counsel can say with a straight face that no one wants to kill net neutrality. Because he's going to be supporting Congress' plan that pretends to save it. That's because the Congressional plans do put in place a few bright line rules that seem important to net neutrality -- saying that it bars "paid prioritization," throttling and the like. The problem is that those are last decade's net neutrality issues. The big broadband providers have already said they're fine with those kinds of rules because they've found ways around them.

Specifically, the big broadband providers are doing things like deliberately overloading interconnect points to force large companies like Netflix to pay not to be throttled. Or they're putting in place totally arbitrary and low data caps, and then offering to "zero rate" certain services, pretending that this is a "consumer friendly" move. Again, as we've said dozens of times, you're not a hero if you save people from a fire that you set yourself. And that's exactly what zero rating is. Access providers set low data caps themselves and then "save" their customers from having to pay for going over those caps... but, only if you use approved services (often ones owned by the access provider themselves).

And this is the problem. Under the existing Wheeler rules, the FCC was able to adjust and respond to efforts by the telcos to continue to abuse net neutrality and block the open internet, while pretending they were doing something else. The Congressional proposals for "net neutrality" actually take away that authority from the FCC. In other words, they are opening the floodgates for the big broadband access providers to screw over customers, by saying (1) you can't do the obviously bad stuff, but you can do the hidden bad stuff that's effectively creates the same problems and (2) the FCC can no longer stop you from doing this.

That's not a plan to save net neutrality or an open internet. It's a plan to bless the access providers' plans to start walling off the internet and getting to double and triple charge companies for offering services. This is a plan to put tollbooths on the internet, but in ways that are less obvious than people were first worried about.

Step 3: Leverage the Controversy

Meanwhile, everyone who wants to kill net neutrality knows what's going to happen here. They will use the fact that Pai's rules absolutely can't withstand scrutiny in the courts to step up and push for the Congressional "rescue." Even more likely: they'll say that we need Congress to step in to "prevent uncertainty" from the inevitable lawsuits. Believe it or not: they're happy that this will get tied up in courts for years, because that gives Congress extra cover to push through this pretend "compromise." You'll hear lots of tut-tutting about "uncertainty" that has to be stopped. But, like zero rating and the fact that it's not heroic if you rescue people from your own fire, the fire here is being set by Ajit Pai and big broadband's key supporters. They're setting this fire of rolling back Wheeler's rules solely to whine about the uncertainty that will be caused by their own unnecessary rule change... and then will say that "only Congress can settle this."

So, what does all this mean? It means people who are mad about this (as you should be) need to be direct in what they're talking about here. Don't pretend that Pai's rule change is the real problem. It's not. It's just a mechanism to get to new regulations from Congress that will cause real problems. Don't let anyone say that the Wheeler rules have harmed the internet or investment. They have not. Don't let anyone (especially supporters of killing net neutrality) launch into self-pitying cries about "uncertainty." Remind them that the uncertainty is coming from them and their supporters. And, most importantly, don't pretend that a bill from Congress pretending to "save" net neutrality will actually do so, when it's quite obvious that the bills being offered will undermine our internet, help big broadband screw over users, and diminish competition.

from the 640K-is-more-memory-than-anyone-will-ever-need dept

One of the hallmarks of Tom Wheeler's FCC was a renewed focus on competition at higher broadband speeds. It's one of the reasons the last FCC bumped the standard definition of broadband from a measly 4 Mbps down, 1 Mbps up, to 25 Mbps down, and 3 Mbps up. That higher benchmark allowed the FCC to point out that roughly two-thirds of American homes lack access to more than one ISP at 25 Mbps or better, highlighting a growing cable monopoly over broadband as DSL providers like AT&T and Verizon shift their attention toward giant media acquisitions and away from residential broadband.

Needless to say, large broadband providers (and the politicians paid to love them) quickly threw a hissy fit, insisting that nobody really needs that much bandwidth. This idea that you don't really need faster speeds falls in line with the industry's (and again, many politicians') ongoing refusal to acknowledge that the broadband market isn't all that competitive. After all, if you admit there's a problem, then you've admitted that somebody may just have to fix it.

FCC Commissioner Mike O'Rielly is squarely on the side of industry on this subject, having voted down the FCC's higher 25 Mbps benchmark. Even though 25 Mbps is a far from radical benchmark, and 3 Mbps upstream remains a bit of a joke, O'Rielly's dissent (pdf), made his disdain for faster speeds (and the technologies that will use them) abundantly clear:

"To justify setting the new benchmark at 25/3, as opposed to the current 4/1 or even 10/1 as several commenters suggested, the Report notes that 4K TV requires 25 Mbps. But 4K TV is still relatively new and is not expected to be widely adopted for years to come. While the statute directs us to look at “advanced” telecommunications capability, this stretches the concept to an untenable extreme. Some people, for example, believe, probably incorrectly, that we are on the path to interplanetary teleportation. Should we include the estimated bandwidth for that as well? "

Chortle! Guffaw! Of course 4K is here now, the streaming of which is already being hamstrung by ISP usage caps, even on ultra-fast connections. Now on the agency's majority, O'Rielly last week again proclaimed that the sector really needs to stop focusing on this whole ultra-fast broadband thing, since faster speeds are really just a novelty:

"The outcry for things like ultrahigh-speed service in certain areas means longer waits for those who have no access or still rely on dialup service, as providers rush to serve the denser and more profitable areas that seek upgrades to this level,” O’Rielly said. “Today, ultrafast residential service is a novelty and good for marketing, but the tiny percentage of people using it cannot drive our policy decisions."

Of course, that's not really true. Ultra-fast broadband and even consistent coverage aren't somehow mutually exclusive; we can focus on getting broadband to rural markets (first at slower speeds), and still enjoy gigabit speeds provided by the likes of Google Fiber. There's not a longer wait for broadband in Cleveland, for example, just because Google Fiber wants to bring broadband to San Antonio. As we've noted, the real reason there are stalled rural broadband deployments is a growing cable monopoly in areas that telcos are effectively giving up on. That FCC data now shows this is not somehow the fault of faster gigabit broadband itself.

The idea that gigabit is a "novelty" or unnecessary bumbles around the newswires occasionally, but originates with industry executives who don't want their own, slower speeds highlighted. But that doesn't mean ultra-fast service isn't important. Data has indicated that prices overall tend to drop in markets with ultra-fast service, which is likely a reflection of the increased competition that brought those speeds in the first place. AT&T's gigabit broadband service, for example, has been anywhere up to $50 less per month in markets where it faces competition from Google Fiber.

But even if there's a touch of marketing hype involved in the gigabit race, ISPs benefit from the fascination with faster speeds as well; numerous providers have noted that just advertising these ultra-fast connections causes consumers (most of whom have absolutely no idea what their current speed even is) to call in and upgrade to faster tiers, even if they're not the fastest options available. As Google Fiber made evident, ultra-fast broadband has captured the imagination of a public tired of overpaying for slower speeds. That excitement, and the surrounding competition, is not a bad thing.

If there's something that does get overlooked in the hype surrounding faster speeds, it's the fact that the United States still pays more for broadband service than a laundry list of developing nations, something the industry -- and O'Rielly -- also don't want highlighted in FCC policy discussions moving forward.

from the in-Comcast-we-trust dept

So we've noted a few times how former FCC boss Tom Wheeler surprised many of us (myself included) simply for basing his telecom policy decisions on actual facts. That doesn't sound like much, but for more than fifteen years, both parties had stocked the agency with a rotating crop of either sector apologists like Michael Powell (now the cable industry's top lobbyist) -- utterly incapable of even admitting the broadband industry had competition problems -- or wishy-washy folks like Julius Genachowski, who basically just told everybody what they wanted to hear, and just hoped things worked out for the best.

Wheeler wound up being a notably different animal for the FCC. He based many of his policy decisions on real-world data collected from actual customers (shocking!), repeatedly highlighted the lack of real broadband competition in many markets (blasphemy!), and, as evident on his shift toward Title II reclassification and net neutrality, actually changed his mind when confronted with evidence that challenged his world view (what insolence!).

Now that Wheeler's back in the private sector, he's unshackled himself somewhat, last week providing an interesting interview with Harvard Law Professor Susan Crawford. In it, Wheeler takes particular aim at Trump's new FCC pick Ajit Pai, noting the new FCC boss (who repeatedly complained that Wheeler left him out of key policy decisions) refused to even meet with him during the last year. Wheeler also chimes in on the subject of net neutrality, municipal broadband, and how ISPs like Comcast and AT&T have an almost nauseating amount of influence over state legislatures.

But the most important part has to do with Wheeler's take on the Trump administration's increasingly obvious plan to defund and defang the FCC as broadband watchdog. Because the industry and our new FCC boss lack the courage to just come out and say this, telecom sector lobbyists (and the various PR flacks, consultants, think tankers, and politicians paid to love them) have concocted a new narrative in which they claim they're simply "streamlining" or "modernizing" government by eliminating the FCC from the equation, and dumping all oversight of megacarriers like AT&T, Comcast and Verizon into the lap of the FTC.

Wheeler, however, was quick to point out the real goal of such a shift:

In the Trump administration, people are talking about stripping regulatory power from the FCC, and essentially taking the agency apart (including moving jurisdiction over internet access to the Federal Trade Commission [FTC]). “Modernizing” the FCC is the lingo being used. What’s your thought about that?

It’s a fraud. The FTC doesn’t have rule-making authority. They’ve got enforcement authority and their enforcement authority is whether or not something is unfair or deceptive. And the FTC has to worry about everything from computer chips to bleach labeling. Of course, carriers want [telecom issues] to get lost in that morass. This was the strategy all along.

So it doesn’t surprise me that the Trump transition team — who were with the American Enterprise Institute and basically longtime supporters of this concept — comes in and says, “Oh, we oughta do away with this.” It makes no sense to get rid of an expert agency and to throw these issues to an agency with no rule-making power that has to compete with everything else that’s going on in the economy, and can only deal with unfair or deceptive practices.

Again, so it's clear, broadband ISPs want all oversight shifted to the FTC because they know the underfunded and overworked agency won't have the ability to actually enforce the rules currently on the books, much less craft new ones should they become necessary. With companies like Comcast facing less organic broadband market pressure than ever, less federal regulatory oversight than ever, and the ability to literally write state protectionist laws keeping your town and city from having any say over this dysfunction, you've got a disaster brewing for consumers and numerous business sectors alike.

To be clear, deregulation does help some industries -- especially those that naturally enjoy healthy competition. But with the amount of control large ISPs have over state legislatures, and the lack of competition in the last mile, the telecom sector is far from a free market. Undaunted by historical evidence of the folly of blind telecom deregulation, ISPs have long argued that if you just leave the industry completely alone, gigabit connections will miraculously sprout from sidewalk cracks and we'll all be living in a telecom utopia in no time. History has proven repeatedly this antiquated belief system is pure folly.

Just when it seemed like we were finally putting this dated fantasy in the rear-view mirror, in comes a brand new plan to effectively neuter the only regulatory agency to stand up to AT&T and Comcast in the last decade. Again, it will go something like this: first Pai and the new FCC will simply refuse to enforce the rules already on the books (net neutrality). From there, you can expect Comcast, AT&T and Verizon's Congressional allies to push for a new Communications Act rewrite that rolls back all of Wheeler's policy proposals and fits the FCC with a shiny new collar and chain.

Said Act will breathlessly profess to create jobs, increase broadband deployment, close the digital divide and finally solve net neutrality, but will do nothing of the sort. What it will actually do is contain ample loopholes ensuring that the FCC can never again actually hold massive broadband and media empires accountable to the public by cutting the agency off at the knees, in part by rolling back Wheeler's Title II classification, but also by shoveling consumer protection off to an FTC whose purview will be similarly constrained over the coming months and years.

The end result of this "modernization"? Less oversight than ever for industry giants AT&T, Comcast, Verizon and Charter. Given these companies' growing size, long and undeniable track record of anti-competitive behavior and outright fraud, what could possibly go wrong?

from the burning-your-own-house-down dept

We've repeatedly noted how the idea of a healthy and open internet, free from the meddling of incumbent giants like Comcast, is a good thing. We've also noted that until we bring some real competition to bear on the broadband sector, the FCC's inconsistent protection is about the only thing separating you from a hearty "servicing" from Comcast corporation (whether that's usage caps or abysmal service). As such, the nation's net neutrality rules (which are really quite basic and if anything didn't go far enough) have broad, bipartisan support, and holding Comcast accountable is a bipartisan, very popular idea.

And while Trump's Presidential campaign endlessly promised Trump would focus on bringing power back to the people, Trump's new FCC boss Ajit Pai -- a former Verizon lawyer -- effectively represents the complete opposite of that. He's yet to seriously stand up to Comcast or any other ISP, adores media consolidation, wants to kill net neutrality, is incapable of admitting the broadband market lacks competition, and has promised to dismantle the FCC's consumer watchdog functions solely at AT&T, Comcast, Verizon and Charter's behest.

"The Trump administration campaigned that they are the voice of the forgotten," Wheeler said in a phone interview with Ars yesterday. "Well you know, the half-dozen major carriers [lobbying against FCC regulations] are hardly forgotten."

The people who are forgotten are the "two-thirds of consumers in America who have one or fewer broadband choices," Wheeler said. "Where are those choices most limited? In the areas where Donald Trump got the strongest response, in rural areas, outside of major cities. If indeed this is an administration that is speaking for those that feel disenfranchised, that representation has to start with saying, 'we need to make sure you have a fast, fair, and open Internet because otherwise you will not be able to connect to the 21st century.'"

In many of these states, convincing people to vote against their own best interests has become an art form. Like in Tennessee, where Representative Marsha Blackburn has allowed companies like Comcast to write horrible laws protecting giant corporations from public accountability (the end result for the consumer should be obvious). Again: improving broadband networks shouldn't be partisan. Ensuring that these networks remain healthy and open shouldn't be partisan. Keeping Comcast from destroying level competitive playing fields should not be partisan. Yet here we are.

For his part, Wheeler responded to indications that the incoming administration intends to kill net neutrality and neuter the FCC with sadness and alarm:

"I think it would be tragic," Wheeler said of taking away the FCC's competition and consumer protection authority. "This is tragic for the American consumer and the competitive marketplace."

"We’re talking about a handful of companies who are lobbying for their own self-interest, and trying to say to the new commission, 'you need to listen to us, not to consumers, not to a competitive marketplace, not to those who could be affected by a network where we act as gatekeepers,'" Wheeler said. "And if they are successful, that will put in jeopardy tens of thousands of other companies that rely on open networks and millions of consumers."

Historically, most FCC bosses paid empty lip service to the competition problem in the broadband sector. Many, like former FCC boss turned top cable lobbyist Michael Powell, went comically out of their way to pretend the market was perfectly healthy. While his solutions were sometimes imperfect, Wheeler was at least capable of admitting that the core issue in the telecom sector is a lack of competition. A lack of competition not only in the last mile, but in the very cable boxes and closed hardware at the heart of the industry's control.

In contrast, Pai's entire platform rests on the idea that the real problem in the broadband sector is that government has been too hard on companies like Comcast and AT&T, and that these companies need less oversight than ever before. Of course, that kind of thinking is what helped create the Comcast and the pricey, annoying broadband and cable sector most consumers know and love today. Believing that dismantling the only government agency to stand up to Comcast this decade is going to somehow fix everything is precisely the kind of thinking that gave us Comcast in the first place.

from the prepare-for-a-backlash dept

We've noted a few times how the incoming Trump-led FCC has made it clear that it not only wants to roll back net neutrality and new broadband privacy rules, but also defund and defang the FCC entirely. The majority of Trump telecom advisors believe that the FCC serves absolutely no role as a consumer protection agency, and should be torn down to the studs -- its only function being to help manage wireless spectrum. With the broadband market clearly broken and uncompetitive (exhibit A: Comcast and its hidden fees, usage caps, and historically awful customer service), eliminating most regulatory oversight of the sector would obviously compound most of the existing problems.

"Yes, we must be vigilant. And the first step in such vigilance is to ask those who want to rush to take away existing protections a simple question: where’s the fire? What has happened since the Open Internet rules were adopted to justify uprooting the policy? As I said a moment ago, network investment is up, investment in innovative services is up, and ISPs revenues – and stock prices - are at record levels. So, where’s the fire Other than the desires of a few ISPs to be free of meaningful oversight, why the sudden rush to undo something that is demonstrably working?

Vigilance requires the FCC or the Congress make the case as to why the American tradition of open networks should be reversed. Fortunately, the rules under which the FCC must operate provides for just such vigilance. Contrary to what you might have heard, reversing the Open Internet rules is not a slam dunk. The effort to undo an open Internet will face the high hurdle, imposed by the Administrative Procedure Act, of a fact-based showing that so much has changed in just two short years that a reversal is justified."

Of course, the new FCC and its net neutrality opponents don't have to kill the rules procedurally -- they can initially just choose to not enforce them. From there, the most likely course of action is to push a new law through Congress that pays lots of lip service to net neutrality and broadband deployment, but is written to actively sabotage regulatory oversight. Such a law likely will contain net neutrality "restrictions" so riddled with loopholes as to effectively make violating net neutrality the law of the land (kind of like the Thune/Upton proposal we warned you about last year).

Whatever the path to deconstruction, Wheeler warned of the obvious, negative repercussions of putting the wolves in charge of the henhouse, and killing rules preventing incumbent ISPs from charging innovators and competitors a "troll toll" just to connect to their customers (aka double dipping):

"We have already seen how AT&T and Verizon have favored their own video services by zerorating their product while forcing consumers to pay data charges for competitors. Just take that behavior and look how it would affect other 21st century services.

Whether it’s Amazon Web Services, or Microsoft’s Azure, or Salesforce.com’s integrated cloudbased
activities, ISPs free from open access obligations and behavioral oversight can choke growth and innovation, or, at the least, demand tribute for passing over their network."

Net neutrality has always been, at its core, about a lack of last mile broadband competition. It's about incumbent ISPs using this monopoly over the broadband last mile to charge companies and consumers -- already paying an arm and a leg for broadband -- an additional troll toll. It's what began the debate when former AT&T CEO Ed Whitacre crowed he wouldn't let "Google ride his pipes for free," and it has simply evolved in the era of "zero rating" -- which requires that competing streaming TV platforms pay up if they want to operate on the same playing field as incumbent services.

It's the lack of competition that creates and encourages net neutrality, privacy, and other ISP abuse. Eliminating rules protecting consumers from this problem -- then gutting all regulatory oversight of the nation's least-liked companies -- won't magically fix this problem, it will simply make it exponentially worse. And while the incoming FCC and its ISP allies are chomping at the bit to begin deconstructing net neutrality, broad, bipartisan consumer support for net neutrality means they can expect a techno-activist backlash that will make the response to SOPA look like a beach-side blanket picnic.

Net neutrality opponents can certainly proceed with their plan to kill net neutrality, but the effort is going to come with a price tag most of them violently underestimate.